Court hearing on MVSD may well be showstopper
Based on their demand for information, it’s safe to conclude that judges Lou D’Apolito and Ronald Rice of the common pleas courts in Mahoning and Trumbull counties, respectively, intend on Aug. 29 to dig deep on into the workings of the Mahoning Valley Sanitary District
On that day, judges D’Apolito and Rice, who make up the MVSD court of jurisdiction, will conduct a hearing on the board’s decision to reimburse $5 million to the cities of Youngstown and Niles and the village of McDonald.
Board President Matt Blair has pointed to a surplus in the district’s operating account to justify the reimbursement, but the judges aren’t about to rubberstamp the transaction.
D’Apolito and Rice have a slew of questions for Blair and others, including this: Why not follow state statute that says surplus funds can be used to retire bonds, reduce the rate assessment or accomplish other legitimate objects of the district?
They also want the names of all the political subdivisions and other entities that get their drinking water from Youngstown and Niles, the two members cities of the Mahoning Valley Sanitary District, and McDonald.
The Meander Reservoir is the source of the water the sanitary district purifies at its plant in Mineral Ridge and then sells in bulk to the three communities. The bulk rates are set by MVSD with the approval of the court of jurisdiction.
Youngstown, Niles and McDonald sell drinking water to their residential and commercial customers and also to users outside their boundaries.
It is this setup that has drawn the attention of the two judges. They have wondered why the surplus funds are not being disbursed to all users.
Indeed, Trumbull County government is putting in a bid for a share of the money that would go to Niles. Under the reimbursement plan, Niles would receive $1.2 million, Youngstown, $3.7 million and McDonald, $100,000.
Customer base
Jim Brutz, assistant Trumbull County prosecutor, is making the case that Niles has more water customers outside the city limits than it does inside. Brutz also points out that noncity users pay a higher rate than those inside the city because of the capital projects MVSD is planning.
Thus, if the refund Niles receives is from the capital-improvements fund, the county deserves its share of the reimbursement because the water customers outside the city helped pay for that, Brutz suggests.
There’s another point of contention that will undoubtedly be raised by D’Apolito and Rice, and it speaks to the basic operation of the sanitary district.
The judges are seeking an explanation for why state law is not being followed with regard to the appointment of an advisory council made up of representatives of all the communities that receive MVSD water.
Then there’s the intriguing question that already has been posed by the judges in a letter to the MVSD’s lawyer:
“Other than for political reasons, why does it make financial sense to the MVSD to return the funds rather than be prepared for future MVSD needs, like dam repairs, etc.?”
Given that the city of Niles is in state-mandated fiscal emergency and is required to develop a balanced budget for each of the next five years, the money from the MVSD would be a godsend.
In Youngstown, the Ohio Auditor’s Office is investigating the city’s use of water and wastewater money for downtown development projects. A well-known developer, Dominic Marchionda, city Finance Director David Bozanich and Atty. Stephen Garea have had documents, computers and other material confiscated.
The situations in Niles and Youngs-town have prompted this question from Judges D’Apolito and Rice:
“Are there any conflicts of interest of any board members in voting for this transfer of funds?”
The issues the court of jurisdiction intends to pursue with the MVSD board could give water customers an up-close look at the operation of the water purification plant in Mineral Ridge.
The hearing in the Trumbull County Common Pleas Court will be the first time in a while that the Mahoning Valley Sanitary District is placed under the court of jursidiction’s microscope.
Given the questions and concerns raised by the judges, it’s safe to assume that just about every aspect of the MVSD will be scrutinized.